Saving Potential in the Logistic Sector

How Global SCS provides transport cost transparency and enables significant savings in the logistics sector.

How a start up earns money by providing transparency

An experienced manager of the first Internet wave founded and is driving the established players to fear. Steffen Rabus wanted to know again. He was one of the managers that did well in the golden age of the first internet revolution at the end of the nineties and the beginning of the noughties. Then, about five years ago, he sold Dynamic Media, one of his businesses where he had also taken an active role, to the e-learning provider imc from Saarbrücken. In recent years, Rabus has invested in several companies and has been an enthusiastic observer at IT events.

Eventually, almost three years ago, he was drawn to become active again and no longer wanted to be just a stakeholder, but to be involved hands-on. And in the creation of his Global Supply Chain Solutions (SCS-G), you realize that here is someone with a lot of depth of experience and not a student who has just become self-employed with an app - but this is in no way intended as a summary.

Together with a logistics expert, they found that large automotive suppliers did not have any cost transparency of their European or global shipments, when for example the goods were brought to an automobile manufacturer. Rabus makes it clear: "If the multinationals wanted to know how much individual plants had paid in a given month to a specific logistic company, it was almost impossible without a lot of effort." There was, and in this respect still is, a lacking in many international companies of any transparency.

Understandable when one considers that large suppliers have their plants distributed worldwide, with many of them working quite independently, often using different IT systems to each other and with a reluctance to show their cards to their headquarters ("but we are profitable"). Furthermore, this market finds itself in a strong consolidation process, with companies buying and selling plants.

Rabus refers to a study which states that the major suppliers buy and sell three to six plants per year on average. "If a global player such as TRW, which owns 60 plants in Europe alone, used a standard ERP system as opposed to one offered by G-SCS, it would take years at best" - but it probably would not even be possible to input all the data – comments Rabus.

Rabus caused a stir when he confidently proclaimed at the Automotive Logistics Europe fair in Bonn that "companies can save nine percent costs in logistics alone". This is possible through greater standardization, harmonization and automation of processes. "Global companies largely miss the transparency of their transport costs within the supply chain process" claims Rabus.

Rabus began in mid-2010 with a small team, which has now grown to nearly 20 employees, to work on developing the software necessary that enables organizations to receive the transparency he demands. And in TRW Automotive, he found a large automotive supplier who was willing to get involved in a collaboration with a startup. Helge Wöbke, responsible for the Europe-wide logistics business at TRW, admits that it was a brave decision to go for an absolute newcomer in the market. An important argument for the top manager was a great flexibility of the software and the consideration of a large number of wishes, which a large software company would not have been able to deliver. In the end Wöbke was right with his decision.

Meanwhile, and Rabus is justly proud, TRW has extended the contract with G-SCS. Today almost 95 percent of the invoices are checked automatically, with the complex tariff structures containing dozens of aggregates (for night driving, second driver, waiting times, etc.) now capable of being represented transparently. Further intelligent software applications of G-SCS now give Wöbke the European transparency that he has always wanted.

As a further confirmation of its efforts, Rabus could land more big fish in the future. He has recorded the data of 300 logistics service providers in 30 countries with his system and risen quickly to become a serious player in this market, with powerful software vendors such as Oracle attacking, whilst dominated by large logistics providers like DHL, Schenker and Kuehne + Nagel, whereby the latter cannot really offer the neutrality and independence of G-SCS.

Of course Rabus is working feverishly on the next steps, because from these masses of data that are available to the systems, it is possible to produce really intelligent results. The founder is optimistic: "The innovation potential of our solutions is still far from being exhausted." And he must keep his promise of nine per cent savings.